GM robs both workers and communities

Detroit Annual Labor Day Parade where trade unionists held a banner in solidarity wiith injured Colombian GM workers, Mon. Sept. 2, 2019
Detroit Annual Labor Day Parade where trade unionists held a banner in solidarity wiith injured Colombian GM workers, Mon. Sept. 2, 2019. | Photo: Abayomi Azikiwe

By Detroit FW Staff

The community at large has a material interest in solidarity with the UAW-GM strike and its battle to reverse General Motors illegal plant closings and lay-offs.

In 2009, GM received $68.1 billion dollars of federal tax dollars, when it was bailed out during the bankruptcy. To this date $8.9 billion of that amount has never been repaid by GM, despite returning to record profits in the years following the bankruptcy.

In exchange for the bailout, GM signed an agreement to abide by the Energy Independence and Security Act, 42 USC 17013. The Act mandates the corporation to build fuel efficient vehicles. GM’s plant closing announcements in 2018 blatantly and flagrantly violated this agreement and law. The plants they shut down produce the Volt and the gas efficient Cruze and parts for them, while GM shifts to more profitable gas-guzzling SUVs and trucks.

In addition to never repaying billions GM received in federal bailout funds, GM pays no federal taxes. A recent article in the Detroit Free Press reported that General Motors has paid no federal taxes for the past ten years. For 2018, when GM reported a profit of $7.916 billion, the corporation actually received a $104 million tax refund.

General Motors also does not pay Michigan state taxes. The company is  the recipient of MEGA tax credits that last for about another 20 years. GM can claim the tax credit any year it makes a profit. The MEGA tax credit states that “The Company will retain jobs and manufacturing operations at any facility in the State of Michigan,” and has language prohibiting relocations. The employment level at the affected plants must be no less than 34,750 retained jobs, defined as a full-time job where the worker is employed for at least 35 hours per week, and that pay at least 150% of the federal minimum wage (temporary workers don’t qualify as workers under this credit). While the precise language of the credits is hard to decipher, it is clear that GM has at least violated the spirit and intent of these tax breaks.

Incredibly, the Michigan Economic Development Corporation and the Michigan Strategic Fund, corporate dominated government agencies, would not even disclose the total value of these tax credits (estimated as at least $3 billion), in response to a Freedom of Information request. The Moratorium Now Coalition, a community based organization in Detroit,  has recently filed an appeal with the Michigan Court of Appeals to force the disclosure of these tax credits, and to end the practice of corporations stealing our tax dollars in secret behind closed doors.

This post was corrected on 10-2-2019.  $104 tax refund was changed to $104 million tax refund.

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